Mr. Bola Onadele Koko is the Managing Director of FMDQ OTC Securities Exchange. In this interview, he spoke on the milestones achieved by the Exchange in its five years of existence and strategies to continue to move the debt market forward. Excerpt: By Nkiruka Nnorom IN the last five years, you must have had some drags developing the market. As it is today, do you have some regrets? •Bola Onadele Koko, FMDQ MD/CEO We knew when we started that we were dealing with change and when you are dealing with change, you have to appreciate the speed you go. First, in the interbank market, we had to get everyone to support the FMDQ initiative and that took a while to understand despite the fact that the banks own the Exchange. FG can’t destroy Biafra by force —- Bishop Enyioha So, very quickly, we appreciated the fact that this was a change programme and it required the temperament to be able to do things right and allow people to assimilate the initiative. I think the market participants have done very well in this regard. We also came into a space that used to be occupied by only one institution. Again, we needed acceptance and I think that acceptance is improving by the day. FMDQ has been in existence for five years now. What are your plans for the next five years? Our plan is to build an alpha and integrated securities exchange for the country and that will include the exchange and a central clearing house. Capital market value chain Hopefully, the legal framework to allow for that to become a central counter-party will be there and any other thing that will come under the capital market value chain. We are going to focus on two big initiatives apart from the exchange and clearing house I talked about and these will be the FMDQ Academy and FMDQ Next. The Academy is going to increase the penetration of education for market practitioners and participants and we are going to invest a lot on that FMDQ Next Generation Financial Market Account during the period. How do you feel when you want to fly at jet speed and you get some sort of set-backs and what are some of the things you think the government should do to help the debt market? It is useful to note that government is required for the legal and regulatory framework in any environment. Government wouldn’t know what we want; the market players will have to take initiatives to the government and by government, I think we are looking at, mostly, the executive and the legislative. Evolution of the market So, we the market players will have to take things to these arms of government. There are some things on the table for them already, but, unfortunately, we are getting to the election cycle during which time the government will be less focused on new legislation. On evolution of the market, we just have to carry the government along and that is why I spoke to our academy. There is need to appreciate why we need to move the market forward and I believe the government will support it. From the regulators, we have received tremendous support, but legislation is now required for the next level. How have you been able to manage issues of infractions in the system? It is interesting you say we are interested in regulation. I remember the first time we won self regulatory organisation in the country. Of course, there was a major push-back because the regulator the banks were used to and believe in was the Central Bank of Nigeria. Awareness and education I think I led the meeting and they agreed that there would be no self regulation because their interpretation was FMDQ will regulate its self. This was 2014 and again, this amplified that this was all about change and we needed awareness and education for everybody. Now, for the members to be regulated, it meant they needed to become members of FMDQ and FMDQ was a start up of about 10, 20 employees and we needed to regulate Zenith Bank, First Bank, Guaranty Trust Bank, all the banks. So, what we did was to start with a lot of engagement, we made sure there rules were those the banks agreed to. We agreed on infractions that they agreed to. All these were debated and they were agreed and signed on to. We made sure that we are not trigger happy; the whole essence was not to start fining people, but to ensure the right market conduct and that helped. When we started, the level of fine was high, but it has dropped over time. I think it was the CBN that nailed the issue of fine by saying that any bank that has a fine from FMDQ must show it in its financial statement; that changed the landscape. Financial statement At that point, the banks began to see FMDQ as a sovereign institution. What we did was to also ensure that not immediately after an infraction you get fined. We know that you have FX Futures and FX Forward markets and there are so many corporate bonds trading on the platform. Are you considering any form of investors’ protection going forward as part of your strategy for the next five years? We already have an Investors Protection Fund (IPF) and the Securities and Exchange Commission, SEC, has approved the Board of Trustees of the Fund. People put their money in banks but banks are not what we are going to protect because that is the role of the National Deposit Insurance Commission (NDIC). We are willing to protect investors that have given money to our members and our members did not do what they are supposed to do. Already, we have developed guidelines, the market has reviewed it; we should be presenting this to SEC very soon before we start operating it. Even when the guidelines are approved, we need to then go one step further to awareness and start talking to the public on the right way to invest and sort of service they should demand.